The Commerce Ministry has instructed officials to examine foreign businesses following reports that many of them are being run by Thai nominees.

Banyong Limprayoonwong, the director-general of the ministry's Business Development Department, said he had received reports of companies violating the Foreign Business Act in tourist destinations, including Chon Buri, Pattaya, Samui and Phuket.

Many foreigners are thought to have asked Thai nationals to hold 51% of company shares, although in reality the whole administration is under the control of the foreigners. Mr Banyong said many Thai nationals whose names are given as the companies' shareholders had been found to be unconnected to the businesses.

Many people had been called in and had admitted giving their names as company executives even when they weren't, which breaches the Foreign Business Act. Some now face legal action.

"Foreigners and Thais should be aware of the law and must not violate it. The punishment is a fine of between 500,000 baht and 1 million baht," Mr Banyong said.